Tuesday, June 24, 2008

Economics of Craft, Part 4 - Returns, returns, returns!

While launching this blog over the past few months, I've gotten all fired up about crafty small business.

At the same time, my Etsy purchases have slowed to a trickle.

It's an uncomfortable disconnect for someone passionate about increasing people's ability to become creative entrepreneurs.

Usually, uncomfortable disconnects offer the most valuable information of all - whether it's a disconnect between your conscious values and the choices you keep making in your life, or between status quo wisdom and your gut sense of what is best.

Q: Why don't I buy on Etsy anymore?
A: Because most of the stuff I buy on Etsy I don't like, and most of the time you can't return it.

I did a quick tally of all my Etsy purchases to date. Out of 36 things purchased for myself (that's a lot of things, isn't it!), I really like and use just 13 of them. A further 10 I use but am not in love with and wouldn't have bought if I'd been able to see them in person. The remaining 13 I've donated to my local thrift store.

Most of the Etsy successes are housewares and art. Most of the failures are clothes. As it happens, clothes, shoes and apparel are more likely to be returned than anything else purchased online. My beloved if embarrassing closet purging guide says you shouldn't buy clothes online, and I am beginning to think the authors are right. I've resolved to spend more money on amazing pillowcases like this one from brokesy and less on impulse clothing buys.

Being happy with only a third of my Etsy purchases is a very low success rate. Why is Etsy shopping so filled with duds?

First, with bricks-and-mortar shopping you can see things in person before committing. Not too much online sellers can do about that, of course (besides a big presence at your local craft fairs!). Another big reason for greater satisfaction with in-person (and Amazon.com) purchases?

Because if you don't like something, you just return it.

In earlier Economics of Craft posts, I dug into why you need to make truly special products if you hope to make a living selling handmade items online. I also promised to share how people hoping to be self-employed, or earn decent supplemental income, from their craft might be able to stand out in the crowd. One suggestion?

Returns, returns, returns!

Offer them gladly! The default among sellers on Etsy, eBay, and a surprising number of independent web storefronts is not to offer returns. While this seems to reduce a lot of hassle and risk, I think the sales benefit to offering returns would exceed the cost.


1. Offering returns creates a sense of security for buyers. Pressing that "Add to Cart" button is easier when you know the decision can be reversed. In a survey of online shoppers, a whopping 90% said that a convenient return policy is important in their decision to purchase from a new or unknown seller. 80% said they are not likely to shop again if they have difficulty returning an item. How many more buyers would Etsy attract if generous return policies became standard??

2. Offering returns demonstrates confidence in your product. How much faith can you have in the products of someone with a snippy "NO RETURNS!!!!!" message in their profile?

3. Even if people say they want the option to return stuff, most don't actually return things. Returning something by mail costs a few dollars and requires an inconvenient trip to the post office. Even if a buyer isn't 100% satisfied, many will simply not bother to make a return. One poll of frequent online shoppers showed that 51% had never returned a single thing. In fact, the longer somebody has shopped online, the less likely they are to return something. This is interesting, since most of the folks trawling for handmade items are likely to be people who buy lots of stuff online.

4. Prove you're a professional - and earn your markup. In the race to differentiate yourself from hobbyists who are willing to undercut you on price, you need to stand out on service. In the next Economics of Craft post, I'll take a look at another aspect of professional-quality service: rapid shipping and the creation of a 'gift experience.'

Moral of the story? A generous return policy is a low-risk way of demonstrating faith in your product, establishing yourself as a professional, and snaring extra sales from cautious shoppers. This is especially true if you are selling clothing.

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